1. NEWS
   
2. Leading the way (not exactly "LEED") for future subdivisions?
   
3. SCHOOL BUDGET RATE HIKE FOR FY9-10?  YUP.  The budget story in full at the ending here...
   
4. CHARTER CHANGES? 
   
5. WILL TOWN OF MONTVILLE NEED TO WIN BIG TO PAY OFF RAND-WHITNEY?
   
6. Montville Culinary Arts students heavy on carrots (improves test scores)...
7. Affordable Housing  applications;
   
8. CASINO and/or ALTERNATIVES:  WPCA under pressure.
9. MUDSLIDE AND SUIT(S)...
   
10. NEW ENERGY PLANT;
11. WATER QUALITY SUIT LATEST (AUGUST 26TH);
12. H20 POLLUTION CONTROL AUTHORITY;
13. FIRE.
    

New London - Wade A. Hyslop Jr.'s first order of business after being elected the 121st mayor of the city Monday night was to replace the blue-and-white novelty license plate the mayor gets to put on his car.

”Blue and white is Waterford,'' said Hyslop as he held up the new plate that read “City of New London Mayor” - this one sporting New London High School green and gold.

”Whaler pride!'' Hyslop shouted.

Hyslop replaces Kevin J. Cavanagh, who served one year as mayor, which is largely a ceremonial position. Councilor John J. Maynard was selected as deputy mayor.  Hyslop, a 14-year veteran of the state legislature, retired from state politics in 2004 and then decided he had more to give. So he ran for City Council in 2007, and won.

Although he is not the first black mayor of the city - Leo Jackson achieved that honor in 1979 - Hyslop says it is important to him to be recognized by his peers and to be mayor of his hometown while Barack Obama is president.

In 1968, Robert Kennedy said that in 40 years the United States could have a Negro president, Hyslop reminded the audience.

”We have arrived,'' he said to a cheering gallery that filled the council benches and rows of folding chairs brought out for the occasion. “It's important for people out there to know that there are people here who can represent everybody.''  When people see others who look like themselves in positions of power, it gives them hope, he added.

”We've seen many people who have gotten involved in the past presidential election,” Hyslop said. “We want to keep them involved.''

After introducing family and friends, Hyslop ordered the meeting to reconvene on Wednesday instead of tonight so that people can attend New London's state playoff football game against Montville.

”There are a lot of people who would like to support our team,'' said Hyslop, who is a 1963 NLHS graduate.

”New London has arrived,'' he told the crowd. “We're not turning a corner, we're on a straightaway.”

Those attending Monday's ceremony included Hyslop's six sisters, assorted nieces and nephews, members of Trinity Missionary Baptist Church, where he is pastor, and political friends from near and far who have stayed in touch, including Attorney General Richard Blumenthal, and Democratic state Reps. Linda Orange of Colchester and Ernest Hewett of New London, as well as Sen. Andrea Stillman of Waterford. Seven former New London mayors were also in attendance.

Secretary of the State Susan Bysiewicz, who served in the legislature with Hyslop, administered the oath of office.

”There's no one better to be a spiritual leader and a government leader,'' she said. “I know you will bring integrity and humility to the office.''

Hyslop counts former mayors Jackson, Jane Glover and Eunice Waller among those who have mentored him through his political career.  Glover, who ran all seven of Hyslop's state campaigns, first came to know Hyslop when he was appointed to fill a vacancy on the city's Board of Education. Glover had wanted the appointment.

”I said, 'Who is this Rev. Hyslop?' '' Glover recalled. “I wanted to go to his house and tell him off.”

But Glover didn't do that and, in time, the two became friends. Together they founded the Kente Cultural Center in New London, where Glover is executive director.

”We laughed about it later,'' she said. “He's always been friendly. He never even knew I was mad until I told him.''

And that, said Glover, is what has made Hyslop an effective politician.

”He's not bullheaded or anything like that. It's not 'my way or the highway,' '' she said.

When Hyslop left the 39th District seat, he was deputy speaker of the House. But his rise to the leadership position took a rather untraditional route.

His political career began as a city selectman - a position that had no power and no duties. He was then appointed to the Board of Education and elected to a full-term. He was tapped almost immediately in 1990 to run for state representative.

His campaign was a grassroots one that took on the Democratic Town Committee and relied on people who had little or no political experience. He challenged Margaret Mary Curtin, now a fellow councilor, who was the Town Committee's candidate, to a primary. There were door-to-door bilingual voter registration drives and a focus on low-income housing complexes that had traditionally been ignored by politicians.  Hyslop won overwhelmingly in the primary, and the election. Voters sent him back to Hartford six more times.

”I've always tried to be a role model,'' he said. “I always tell people you don't know who's watching you at any given time. You should always do the best you can do.”

He said he enjoyed working in Hartford and hopes he can use his experience at the local level.

”I hope I'll be able to provide some insight in how we can best focus on the needs of New London,'' he said. “I'd like to lend my experience to the city, and I hope to be somewhat useful in my quest to help.''

Montville –– When Montville High School senior Ashley Gibbs returned to school briefly Thursday the strong smell of cleaning fluid assaulted her nostrils.

Gibbs was among several hundred students escorted into the school to get items stored in their lockers. Workers completed a thorough cleaning of the school Wednesday, eliminating the lingering smell of smoke from the fire Sunday that heavily damaged the auditorium and gymnasium.

“I was so shocked that it was so clean already,” Gibbs said. “I couldn't even tell that it was even on fire because you couldn't get to that part of the school.”

A wall has been erected around the portion of the school closest to the gymnasium and auditorium. It seals off the charred remains of the stage area, lighting and other
equipment destroyed by the blaze. Workers also are taking steps to ensure that dust particles and potentially hazardous material are contained while asbestos is cleared.

Students were escorted in groups of about 25, walking from the Tyl Middle School through the school grounds to the high school. They were given about 10 minutes to get what they needed out of their lockers, and at about 9:30 a.m. they were bused home.  Senior Ben Patnode got a book he wanted and an empty wallet from his locker. Patnode said the short day helped reassure him that everything will be close to normal when students return to school Jan. 2.

“It gave us some closure and they also let us go so that we can see what's been done and so we see that the entire school is not gone,” he said. “It felt good knowing that we didn't lose everything and that all the lockers and classrooms are still safe.”

Students began arriving at the middle school shortly after 7:30, meeting first in the gymnasium for a breakfast that included egg sandwiches, cereal, fruits, orange juice and milk. They then gathered in the middle school auditorium, where high school Principal William F. Farrington Jr. described the situation.  Farrington said that teachers and staff have been working and will continue to work over the Christmas break to prepare for the school's reopening. Administrators want daily activities in the school to
continue as normally as possible during the cleanup and renovation, he said.It will take up to a year for repairs and renovations to be completed at an estimated cost of more than $3 million. School officials are awaiting the results of a structural engineering study to determine how many of the steel trusses and supporting posts in the auditorium have to be replaced.

School Superintendent David Erwin said school officials were informed that the gymnasium floor could be saved. Large sections of the roof, which was cut away by firefighters to release the intense heat of the fire, must be replaced, Erwin said.  “We have gotten a lot of support and advice, and I really think this has brought everyone closer together,” Erwin said.            

Montville — Board of Education members Wednesday night outlined a massive $41.1 million school improvement plan that calls for additions to five of the town's six schools and renovations and site work at all of them.

Nearly all of the seven-year plan would be eligible for about 65 percent reimbursement from the state, reducing the cost to local taxpayers to an estimated $17 million, according to school officials.  The proposal will be reviewed by the Town Council later this month and would have to go before voters at a townwide referendum later this year.

“This is preliminary and we are saying here that it is going to increase the tax burden in the future,” said Superintendent David Erwin. “If we are going to go through with this we want to let the public know that we're presenting the best cost-effective project to the taxpayers of this town.”

Erwin stressed that the best way to save money is to complete all of the work in a single project.  The study was presented by W. Albert Jacunski of Jacunski Humes Architects LLC of Newington.  Jacunski and other members of the firm spent a year studying the school infrastructure and facilities, interviewing staff, faculty and students at all of the town's schools.

Under the plan, Mohegan Elementary School would be expanded by 5,800 square feet at a cost of $5.7 million. About 21,000 square feet of the interior of the building would be renovated and the roof on the east wing would be repaired. About $440,000 in site work is proposed, as is about $1.5 million for fire and building code updates.

Montville High School would get about $16.9 million in improvements, including eight new classrooms, a new cafeteria, a main office area, a library and music space totaling 16,925 square feet of space. A 2,400-square-foot maintenance building and a 1,800-square-foot space to for a physical education bathroom and storage facility would be built. The plan also calls for a new gymnasium and athletic field bleachers at a cost of $620,000, a new auditorium lighting and sound system and window replacement at a cost of $856,000.

The Palmer Alternative Education School would get $2.6 million in upgrades. The Charles E. Murphy Elementary School would get $7.5 million in improvements, including a 7,135-square-foot addition of
five classrooms, interior renovations and fire and safety code upgrades. The plan calls for the elimination of the school's electric heat to add a new central boiler plant at a cost of about $870,000.

A 12,845-square-foot addition, including three classrooms, a gym and a library, is planned for the Oakdale Elementary School. The school would get $7.5 million in improvements.

The Leonard J. Tyl Middle School, the town's newest school, would get $795,000 worth of improvements, including a 1,800-square-foot addition for storage and bathrooms.

Town Council Chairman Joseph Jaskiewicz said the proposal would go before the Town Council June 11.

“We will likely give it our blessing to go to the state, but we're going to really look at this,” he said.  “I'm sure we're going to have further discussions before this goes to the town voters.”

Prediction:  since the owner of this company is the same guy who owns the New England Patriots football team, depending on how the judge sees it, there may not be any more Patriots fans in...Montville, CT!

I don't think they will be able to bond this even if they want to...but maybe I'm all wet!
Montville Voters OK $12M To Pay Rand-Whitney; Bond money will satisfy judgment against town 
DAY
By Megan Bard    
Published on 10/8/2008

Montville - The town will issue up to $12 million in bonds to pay Rand-Whitney Containerboard to satisfy a federal court judgment against the town.  With 13 percent of eligible people voting, taxpayers approved the request 988 to 246 at a townwide referendum Tuesday.  After waiting anxiously for the results to be announced, Mayor Joseph Jaskiewicz thanked voters for their support.

”I can't tell you how pleased I am,” Jaskiewicz said.

The mayor will talk to attorneys and financial advisers today to begin the bonding process.  Town Council member John Geary, who also serves on the Water Pollution Control Authority, said it is a “tragedy” that the taxpayers had to consider such a question, but that he was relieved it passed.

”We lost on the basis of a technicality,” Geary said of the U.S. District Court judge's 2002 decision to set aside an earlier jury decision in favor of the town. “Anyone who attended the trial realized that the jury had it right.”

In August, a federal appellate court upheld the lower court judge's ruling that the town owes the paper making company $11.68 million. Rand-Whitney claimed that the amount would pay for past and future damages done to its linerboard operations when the town failed to comply with a 60-year contract signed in 1992 to provide clean water to the company.

The contract requires the town to treat wastewater sent by the company to the town's treatment plant and then return the cleaned water to the mill. At issue was the town's inability to clean the water to the standard it promised.

Late Tuesday, Patrick Kinney, a spokesman for Rand-Whitney, said the company is pleased with the results and that it looks forward to working with the town to solve whatever outstanding issues remain.  Kinney said prior to the judgment, town and company officials were working diligently on a settlement. He said he hoped that “spirit of cooperation” continues.

”We understand that this issue has been contentious and troubling for the community, but it's one where we signed a contract and we want to run our business and continue to do business in Montville. With the judgment behind us we really do look forward to working with the leadership of the town,” Kinney said.

Several people who cast a ballot Tuesday said they voted yes not because they support the judgment, but because they feared what would happen if the referendum question was rejected.

If the bond request had been rejected, Rand-Whitney still would have been paid; the money would have come from a separate bond the town acquired through an insurance company prior to it appealing the U.S. District court ruling. The insurance company would have paid Rand-Whitney and then could have sought restitution from the town within 90 days.

The WPCA is researching a way to improve the quality of the water returned to Rand-Whitney.

Interesting indirect impact of financial crisis - what rate will Montville have to pay for these bonds?
Rand-Whitney judgment rests with taxpayers;  Voters to decide Tuesday on whether to bond up to $12M 
DAY
By Megan Bard    
Published on 10/4/2008 

Montville - When the town signed the contract with Rand-Whitney Containerboard in 1992, the proposal to recycle the wastewater from the mill and return it for its operations was possibly the first of its kind in the country.  Town and mill officials were excited by the possibilities and anxious for the process to commence.

It didn't take long before officials realized that the process was deficient. The large volume of water from the paper mill was too difficult to treat, and the company was complaining that what was being returned was too dirty to use.

The end result is a federal judgment rendered in August against the town to pay Rand-Whitney $11.68 million for past and future damages caused by the water to its equipment. The decision ends 12 years worth of litigation involving accusations of fraud against the company and incompetency and possible deception against the town.

Taxpayers will decide Tuesday whether to allow the town to bond up to $12 million to pay the court order. The bond, plus millions of dollars in interest, will be repaid over 15 years.

Town officials have asked residents to put aside their anger and to approve the request. If the bonding package fails, they say, the town might be in worse shape than it is now. As a condition to appeal an original federal judgment against the town, officials had to acquire a $16 million insurance bond. If the referendum fails, the town is required to use the insurance bond to pay Rand-Whitney. If the insurance bond is used, that company will then seek repayment of the bond, and legal fees, from the town, possibly within 90 days, the amount of time the court set for the town to pay the judgment.

Still, the prospect of having to bond millions of dollars and get nothing in return - no town park, no new school - has left a sour taste in many residents' mouths. Several are outspoken about their disdain for the proposal and are actively campaigning against the referendum question's approval.

The troubles related to the 12-year-old lawsuit spanned not only a decade but several political administrations held by different political parties.

The 60-year contract was signed in mid-1992, a time when the economy in the area was reeling from the collapse of the national housing marking and downsizing of the defense contractors. At that time one of the town's attorney cautioned officials against putting their names on the document, according to published reports. Officials signed the contract anyway based on an assurance from Rand-Whitney that the quality of the water sent by their updated mill would be the same as what had been historically sent to the treatment plant.

When the new paper mill came online in 1995, it was immediately apparent there was a problem with the water. After a year of no resolution - the company offered to give the town $1 million for the work if the town bonded the money because it was eligible for a lower interest rate, but the offer was not accepted - the company sued the town in 1996.

The lawsuit was put on hold until 2001, during which time the two sides tried to rectify the issue by upgrading the treatment plant or proposing to segregate the wastewater sent to and from the company from the rest of the water treated by the plant. The later proposal was rejected by the state Department of Environmental Protection.

When the lawsuit finally went to trial in 2002, a federal jury found in favor of the town, saying it was a victim of corporate deception. The jury determined that Rand-Whitney officials had intentionally deceived the town by saying the quality of the water it would send after the mill's 1995 expansion would be the same at it was sending until that time.

The victory did not last long. U.S. District Court Judge Holly Fitzsimmons set aside the jury's decision and in 2005 seated a second jury to decide how much the town owned the firm in damages. That jury ordered the town to pay Rand-Whitney $10 million plus legal fees. The judge also later refused to let the town rewrite the 60-year contract, claiming that the town had failed to prove its case that officials had relied on false information provided by the company when the agreement was drafted.

Town officials recently estimated it would have cost nearly $16 million if the full judgment was upheld by a federal appellate court.

Devastated by the judgment, the town appealed. It had some success. In August this year the appellate court judge's panel upheld the original $10 million order, plus $1.68 million in interest. The panel dismissed the claim for legal fees, stating that as a rule of law neither side is required to pay legal fees for the other.

Montville tries to persuade voters to pay Rand judgment over 15 years;  Rejecting $12M bond referendum could cost town dearly, and sooner 
DAY
By Megan Bard    
Published on 9/25/2008 

Montville - If the Oct. 7 referendum question regarding the $11.68 million Rand-Whitney Containerboard judgment fails, the consequences could be worse than having to pay the debt over 15 years.

Town officials and attorneys told taxpayers Wednesday evening that despite their anger and frustration, it is in the best interests of the town - and, possibly, residents' wallets - to approve the town's request to bond the debt over 15 years.

”There is really no option, unfortunately, and it pains me to tell you that,” Attorney Dina S. Fisher of Robinson & Cole told the nearly 60 people in the Leonard J. Tyl Middle School auditorium.

In August, a federal appellate court panel of judges affirmed a lower court's decision that the town failed to adhere to a 1992 contract that promised the wastewater treatment plant could provide the company with a specific quality of water necessary in its production.

The town now has until the end of November to pay the judgment.

Once the attorneys and town officials finished a quick synopsis of the history of the federal lawsuit, which stretches back to 1996, resident Lee Wolf cut to the chase.

”How will it affect the mill rate?” Wolf asked.

After Finance Director Theresa Fafard shared the possible effects on taxpayers annually over the 15-year life of the bond, Wolf said, “I hope every season of those 15 years the Patriots lose.”

The Kraft family, which owns Rand-Whitney, also owns the New England Patriots football franchise.

Attorney S. Frank D'Ercole said that if the request is rejected on Oct. 7 and an insurance company pays the debt, the insurance company can require the town to pay the entire amount back in one lump sum within 90 days.

If the town does not pay, the insurance company can sue to collect the payment and, unlike in the Rand-Whitney case where the town is not liable for the company's legal fees, it may be required to pay the insurance company's legal expenses.

”It's bad or worse, take your pick,” resident David Bottigliere said of the situation.

When asked whether the water issues have been corrected, Gene Jambour, chairman of the WPCA, said the agency is working on correcting the problem now.

A previous proposal to segregate the water sent by Rand-Whitney and treat it separately before sending it back to the company was rejected by the state Department of Environmental Protection in 2001, Fisher said.

Members of the Town Council and the Water Pollution Control Authority will meet tonight at 7 at the Town Hall, first in a closed-door session and then in public, to discuss the status of the Memorandum of Understanding with Rand-Whitney. The document had been drafted in an effort to settle the case and establish a means to rectify the water-treatment issues.

-----------------

THE EFFECT ON THE TAX RATE, PROPERTY OWNERS

In 2010, at the peak of the bond repayment, the effect on the tax rate will be an additional 0.84 mills. This means that the owner of a property assessed at:

The estimates could change depending on the fluctuation of the municipal budget and the town's Grand List.

SOURCE: MONTVILLE FINANCE DIRECTOR THERESA FAFARD
 
THE VOTING

What: Referendum on request to take out $12 million in general obligation bonds to pay off the court imposed debt to Rand-Whitney Containerboard Ltd.

When: Oct. 7 from 6 a.m. until 8 p.m.

Where: One of three polling places:

Absentee ballots are available in the town clerk's office at Town Hall.
 
WHAT THE TOWN OWES

A breakdown of what the town owes Rand-Whitney:

Judgment: $10,516,081

Post-judgment interest: $1,164,199

Total owed: $11,680,280

SOURCE: TOWN OF MONTVILLE 

Montville's Silver Lining: Loss Could Have Cost $4M More 
DAY
By Megan Bard   
Published on 8/27/2008 
       
Montville - The town may owe a significant amount to Rand-Whitney Containerboard Ltd., but if officials hadn't appealed a 2006 jury award in favor of the company, it could have been far worse financially, according to town officials.

In 1996, Rand-Whitney sued the Montville, claiming town officials did not comply with a 1993 contract when they failed to provide the required quality of water from the town treatment plant to the company.  The containerboard company uses the water to produce its products and claimed the substandard quality damaged its output.

On Tuesday, town officials said if there is a silver lining to the decision made Monday by a judges' panel of the U.S. 2nd District Court of Appeals, it is that it clarified a clause in the contract that the town is not liable for paying the company's legal fees in any disputes arising from the contract. Based on this, the judges agreed to reject Rand-Whitney's request that the town pay roughly $4 million in accrued and potential legal fees associated with the appeal process.

For this reason, instead of paying Rand $15.19 million in damages, interest and legal fees, the town owes the company $11.68 million. The legally imposed debt to the company is the result of the judges' reluctance to reverse various decisions by a lower court in favor of the company, including that the town erred when it did to provide the quality of water officials said they would to the company from the municipal treatment plant.
Townspeople have 90 days from Monday to decide how they will pay the legally imposed debt, which increases by $1,460 in interest each day.  Town Bond Counsel Frank D'Ercole said Tuesday the Town Council is expected to have a special meeting Thursday to consider a bond resolution to borrow $12 million in general-obligation bonds to pay the judgment. The town would have 15 years to pay off the bond using municipal taxes, he said.

If the council approves the resolution, the next step is for taxpayers to vote on the issue at a referendum, possibly in September or early October.

If taxpayers reject the proposal, a separate bond taken out by the town in 2007 with an insurance company, as a condition of its federal appeal, will be used to pay the debt. If this happens, the insurance company would be expected to solicit the town for reimbursement of that bond, D'Ercole said.

Mayor Joseph Jaskiewicz said Tuesday he hopes taxpayers abide by the court's decision and support the general-obligation bond request.

Jaskiewicz said he might recommend to councilors Thursday that they consider using $1 million or more from the town's budget surplus to offset the amount needed to be bonded. He said using some surplus funds could save the town hundreds of thousands of dollars in interest payments over the 15-year payoff and decrease the town's debt-service obligation, lowering the amount taxpayers would have to pay.

----------------

A breakdown of what the town owes Rand-Whitney:
Judgment: $10,516,081
Post-judgment interest: $1,164,199
Total owed: $11,680,280

SOURCE: TOWN OF MONTVILLE

Appellate court rules against Montville    
DAY
Posted on Aug 26, 7:03 AM EDT 
 
MONTVILLE, Conn. (AP) -- A federal appeals court has upheld a ruling that Montville must pay $11.5 million to a cardboard box company in a water dispute.

Three years ago a Bridgeport federal jury awarded Rand-Whitney Containerboard millions of dollars because the town had failed to comply with a 1993 agreement with the company.  The town said it would provide the quality of water the company needs to produce its paper products, but the company contends it had not done so.

The jury in 2005 found that water treated and returned to Rand-Whitney contained dissolved solids the town could not remove.

A panel of three judges for the 2nd U.S. Circuit Court of Appeals in New York concluded Monday that three of the town's four requests to reverse various decisions made by the lower court are without merit.

The appeals court upheld the town's fourth request which is to not pay for Rand's attorney's fees.

Montville awaits ruling on appeal; A Rand-Whitney case victory could affect contracts 
DAY
By Amy Renczkowski    
Published on 7/19/2008 

Montville - The contracts the town has with Rand-Whitney Containerboard Corp. could be affected by the outcome of the town's appeal in the U.S. 2nd District Circuit Court of Appeals.

If the town wins most of the motions in its appeal, especially the motion to allow the 2002 verdict favoring the town, Mayor Joseph Jaskiewicz said he would look to the court to allow the 65-year agreement it has with the paper company to be modified.

”We would definitely have that looked at,” Jaskiewicz said.

The town's attorney, Linda Morkan of Robinson & Cole of Hartford, said the judges' decision would dictate whether or not they could modify the contracts.

The appeal was heard Thursday in New York City and neither Rand-Whitney nor the town are expecting a decision to be announced for a few weeks.

There are three contracts the town signed with Rand-Whitney in the early '90s: a water supply agreement, a wastewater treatment agreement and a modification agreement.

They are valid 45 years with an option for the paper company to extend the agreements another 20 years.

It was over the water supply agreement that Rand-Whitney sued the town in 1996.

The water supply agreement, signed in 1992, provided that the mill's wastewater would be treated separately from the town's general effluent. The segregation process was proposed by Tom Bowen, the former Water Pollution Control Authority superintendent, and approved by the Department of Environmental Protection.

Shortly after the DEP approved the plan, it rescinded its approval and required the town to mix its effluent with the general effluent.

Rand-Whitney says the treated wastewater has an excessive amount of dissolved solids, or salt, which corrupts the papermaking process.

James Cobery, an attorney for Rand-Whitney, said in a previous interview that only nine days after the mill went online in 1996, there were problems.

”There was so much salt in the water, the boiler couldn't boil,” Cobery said. “It's like a washing machine with too much foam.”

From that point on, the town was unable to meet the quality requirements of the water-supply agreement.

The mill can still make the recycled paper, but at a greater cost. The lawsuit, which could cost the town nearly $16 million, is for past and present damages for the Rand-Whitney plant.

If Rand-Whitney wins the appeal, their attorney James Cobery has already said the contract wouldn't be modified. 

Court hears arguments by Montville, Rand-Whitney ; Town fighting to avoid $16 million settlement
DAY
By Amy Renczkowski   
Published on 7/18/2008

New York - Attorneys for Rand-Whitney Containerboard Corp. and the town of Montville argued before the U.S. 2nd District Court of Appeals Thursday over the validity of 6-year-old testimony by the town's former Water Pollution Control Authority superintendent.

The hearing could mark the end of the 12-year court battle between Montville and Rand-Whitney over the quality of water the town's WPCA provided the mill for its paper-making processes.

If it loses the appeal, Montville would have to pay a nearly $16 million settlement, including interest and legal fees. Rand-Whitney was awarded the settlement after the original federal jury trial, which came out in the town's favor, was reversed.

Montville's attorney, Linda Morkan of Robinson & Cole LLP in Hartford, didn't waste any time before she told the judges - Guido Calabresi, Jon Newman and Barrington Parker - that the original judgment in favor of the town shouldn't have been reversed.

”It was the jury's job to decide and they answered it,” Morkan said.

Most of the discussion inside the ceremonial courtroom on the ninth floor of the courthouse focused on the testimony of ex-WPCA Superintendent Thomas Bowen when the trial was first heard in 2002. Morkan argued that Bowen relied on information provided by Rand-Whitney that the quality of effluent discharged by the new mill would be the same as, or similar to, the effluent discharged by the old plant.

She said the town entered into the water-supply agreement with “reassurance” from Rand-Whitney. But the amount of TDS - total dissolved solids - in the water was much more than both Rand-Whitney and the town expected, according to Morkan.

After talks with town officials about possible remedies, Rand-Whitney spent millions of dollars to upgrade the WPCA's treatment facility and filed the lawsuit.

Judge Parker asked if Bowen relied on anyone else to give him information about the expected quality of the water.

Morkan said her interpretation of Bowen's testimony is that he was only concerned with two specific components of the water, and not the TDS levels, because the town needed to comply with Department of Environmental Protection rules.

”Bowen by nature was a cautious man,” Morkan said. “Why would the town agree to supply water when it had no way of satisfying the agreement?”

Judge Calabresi said it was remarkable that Bowen conducted all the tests he did, and even had a backup plan he was going to run by the DEP, yet he didn't test the amount of TDS in the water.

Rand-Whitney attorney Daniel Goldberg of Bingham McCutchen LLP in Boston argued that Bowen wasn't misrepresented by the paper company and that Rand-Whitney did not defraud the town.

”Bowen said several times when asked that he didn't rely on what they said,” Goldberg said.

The process

A few town councilors and members of the WPCA attended the hearing. On the way to the courthouse, Town Council Chairman Candy Buebendorf bought a $1 fortune at a Buddhist temple in Chinatown. She waited to open it until just before she entered court and then smiled.

”The probability of success: excellent,” it read.

The hearing for the appeal lasted less than an hour, and the judges said they wouldn't render a decision that day. Both groups think the judgment won't be announced for a few weeks.

WPCA chairman Gene Jambor said he thinks the important parts of the case were addressed, despite the limited time.

”I think they're all on the fence,” Jambor said. “All three judges.”

Councilor Rosetta Jones said she thought Morkan's arguments were solid.

”I'm just praying for the town and taxpayers that we win,” Jones said. “It could be catastrophic.”

Rand-Whitney spokesman Pat Kinney said the company was pleased with the proceedings, saying, “We're looking forward to the judge's decision.”

Mayor Joseph Jaskiewicz didn't attend the hearing but said he remained optimistic about the case when reached by phone later in the day.

”We have to sit and wait and light a lot of candles,” Jaskiewicz said.

---------------------------

THE MOTIONS

The Town of Montville's appeal contains four motions:

• To lower the amount of money awarded to Rand-Whitney
• To reverse the U.S. District Court verdict that favored Rand-Whitney
• To lower or throw out the decision by Fitzsimmons to award legal fees to Rand-Whitney
• To find legal impossibility

Lawmakers Oppose 'Gift' Of $5.5 Million To Rand Whitney; Funds are 'incentive' to create power station that already exists 
DAY
By Ted Mann    
Published on 11/21/2007 

A group of state lawmakers are seeking to prevent $5.5 million in proposed grant payments to Rand Whitney Containerboard Corp., calling it a “gift” that would set a “dangerous precedent” by allowing companies to take public funds as incentives for power generation stations that have already been built.

The lawmakers objected in letters to the Department of Public Utility Control, which is expected to rule this morning on whether to issue a grant totaling more than $6 million to Rand Whitney, as part of a 2005 state program that was intended to encourage large electric users to generate some of their own power, thereby lessening the strain on the state's electric grid. The grants come directly from individual electric customers — they are raised by a surcharge on monthly bills.

“Those of us in the Legislature often find energy issues complicated, but this seems fairly clear,” wrote Rep. Joan A. Lewis, D-Coventry.

“When we provide an incentive grant, it is for something that we expect to happen in the future, not to pay for something that already exists.”

Rand Whitney's lobbyists convinced legislative leaders to include a little-noticed provision in sweeping energy legislation passed this spring, which they contend should entitle the company to receive grants for the power turbine it installed in its Montville plant before the incentive program began, provided the turbine is upgraded to be more efficient.

But a few of those who voted for that energy bill to become law now say that's never what they intended to do, and argue that it doesn't make any sense to pay public money to a private company for actions it has already taken.

“Providing 'incentives' to a company for something they have already done is nothing more than a gift,” wrote Rep. Deborah W. Heinrich, D-Madison, “and there is nothing in your charter which allows you to distribute gifts of ratepayer funds.”

The intent of the provision in the energy bill “was in no way to provide grants for generation that has already been built,” wrote Rep. Betsy Ritter, D-Waterford.

The lawmakers' letters urged the DPUC to approve a grant only for the new megawatts that the company's proposed improvements would provide, or about $880,000.

Spokesmen for Rand Whitney have defended their grant application. In a written statement earlier this month, the company's director of regulatory affairs, Paul Schaffman, said the addition of the company's generating turbine in Montville “will benefit consumers of electricity throughout the state.”

The company's powerful lobbyists have also been busy, from convincing legislators to include the new language, which was tucked into Section 20 of the 114-section energy bill this spring, to a series of e-mails to DPUC commissioners, urging them to conclude that the changes in the law entitle Rand Whitney to the full $6.39 million the company seeks.

“... As we have stated, the statute is clear and intends to allow companies like Rand Whitney to qualify for prior investment if they meet the criteria set out in statute,” wrote Jay F. Malcynsky, a prominent state lobbyist and Republican political consultant, in an Oct. 16 e-mail to Commissioner Anthony Palermino, two weeks before Palermino issued a draft ruling that concurred with that analysis. The e-mails were obtained under the state's open records law.

That's the same conclusion reached by Sen. John Fonfara, D-Hartford, the co-chairman of the legislature's Energy and Technology Committee and an architect of the 2007 energy bill, who wrote in a letter to the DPUC that the company's arguments “properly represent the intent of the General Assembly.”

But others said they would never have supported such a measure, including Reps. Vickie Nardello, D-Prospect, Henry Genga, D-East Hartford, and Kim Fawcett, D-Fairfield.

Their letters are in accord with the filings submitted by Joseph A. Rosenthal, the principal attorney in the state Office of Consumer Counsel, who has called the proposed grant an “outrageous gift” of ratepayer funds, and pledged to fight the DPUC ruling in court if it is ratified by the commissioners.

“It is perhaps sad that Rand Whitney built their plant a bit too early (before that grant program),” Rosenthal wrote in an e-mail message to staff in October, “but what that means is — they didn't need our money to build it.”

Judge Rejects Town's Bond In Rand-Whitney Suit, Judge Wants The Bond Rewritten; Montville Mayor Will Re-File Immediately 
DAY
By Amy Renczkowski     
Published on 9/13/2007

Montville — A U.S. Second Circuit Court judge announced Tuesday that she would not approve a $16 million bond filed by the town in a lawsuit by Rand-Whitney Containerboard Corp.

In August, the town filed an appeal to the court in a lawsuit over the quality of water provided to the company by the town Water Pollution Control Authority. The company uses the water in its papermaking processes.
Judge Holly B. Fitzsimmons, who was previously overseeing the case in U.S. District Court in Bridgeport, demanded that Montville post bond if it wanted to appeal the lawsuit. Travelers' Casualty and Surety Co. of America issued the bond.

The bond protects Rand-Whitney if Montville loses its appeal. James Cobery, an attorney for Rand-Whitney, said the bond would make it easier to collect if the judgment is in the company's favor.

Fitzsimmons argued that the language in the bond was not clear. She said the wording of the bond needs to be written so that the judgment would be paid within 90 days of the Court of Appeals decision.

“This time period is based on the representations made in earlier filings by the defendants (Montville) that it would take 90 days to obtain referendum approval to issue municipal bonds,” she said.

During the time it takes the town to file another bond, the paper mill can act on the judgment while the appeal is pending. Representatives from Rand-Whitney said they hope that isn't needed.

“We hope that the town solves this problem, and they post a bond so that that isn't necessary,” said Patrick Kinney, spokesman for Rand-Whitney.

Mayor Joseph Jaskiewicz said he would issue another bond “as quick as possible” and hopes to have another one filed and approved by Monday.

Fitzsimmons also denied the town's motion to stay the execution of judgment. In the town's motion for approval of the bond and stay of execution of judgment, it claimed Rand-Whitney has refused to pay Montville more than $235,000 in service fees and payments in July and August. Rand-Whitney's service fee and bond payments make up more than one-third of the Water Pollution Control Authority's operating budget. It is the highest-paying recipient of WPCA services.

Fitzsimmons said the town hasn't taken any steps to prepare for the possibility that it might have to satisfy the large judgment entered against them. The town is aware that post-judgment interest, at current rates, is accruing at approximately $50,000 a month. Despite this knowledge, she said the town has failed to allocate any funds to pay the judgment or to post a bond.

“(Montville) has had sufficient time to conduct a referendum for voter approval to issue municipal bonds. ... Instead, the town took no action,” she said. “The defendants (Montville) cannot provide adequate assurances that a referendum will result in approval and, in fact, based on the history and political sensitivity of this litigation, it is uncertain that the voters will approve this authority.”

Jaskiewicz said that when the second bond is approved, Rand-Whitney would be required to start paying the service fees it owes.

Kinney said the judge's decision speaks for itself.

“It is unfortunate that the town has, for so long, ignored its legal obligation,” he said. “It is extremely frustrating to face a situation where the town continues to act as though the judgment does not exist.”

Rand-Whitney judge rejects Montville's bond proposal; Calls the wording inadequate to secure $15 million worth judgements
Norwich Bulletin
Sep 12, 2007 @ 05:47 PM

MONTVILLE - A federal judge has rejected Montville proposal to float a bond while it appeals $15 million worth of  legal judgments that have been awarded to Rand-Whitney Containerboard.

In a 12-page decision issued on Sept. 12, U.S. Magistrate Judge Holly B. Fitzsimmons disapproved the town’s motion for a supersedeas bond, in which a third party, usually an insurance company, holds the money until all appeals are exhausted.

Rand-Whitney won a $10 million judgment against the town in 2005 stemming from a dispute over the quality of water that the paperboard company was receiving from the town’s Water Pollution Control Authority.

An additional $3 million in costs and attorney’s fees was added by Fitzsimmons in October 2006. The town is running up interest charges of about $50,000 a month while it appeals the case, most recently to the U.S. 2nd Circuit in New York City.

Fitzsimmons on Tuesday rejected the bond proposal, saying that the language in the bond was “inadequate to secure timely payment of the judgment.”

Settle With Rand-Whitney  
DAY editorial
Published on 8/10/2007 

The town of Montville faces a lose-lose situation in its lawsuit with Rand Whitney Containerboard Corp. The town should negotiate a payoff to the company because its chances of winning the lawsuit on appeal to the 2nd Circuit federal court are minimal and the town's financial exposure is large.

This is not a case of the town's having nothing to lose by appealing. Montville already lost the case in a state court and lost an appeal in federal District Court. The odds are that Montville stands to pay millions of dollars more by pursuing a case in which the evidence is clear against the town. In fact, in her decision, federal District Court Judge Holly Fitzsimmons warned Montville about a larger potential liability and chastised the town for not acting more judiciously.

“... The defendants' motion disturbingly and repeatedly distorts and mischaracterizes the record, and misstates the facts,” Judge Fitzsimmons said in her decision.

Prosecuting that appeal to the finish is likely to result in very large additional legal fees. In that instance, the prospect of pushing the town's financial liability beyond the $16 million figure awarded by a United States District Court judge is very real. Negotiating a settlement is more realistic, responsible and beneficial to Montville.

Montville taxpayers are going to face severe financial pain either way, but it's possible the town could save itself more than $3 million or $4 million if it recognized reality and negotiated a conclusion to the case.

Town officials shouldn't blame Rand Whitney. The company is doing what any business would do: protect its financial interests. The fundamental problem is that Montville town officials many years ago agreed to a contract with Rand Whitney that the town is incapable of meeting regarding the providing of high-quality water for the plant's operation.

Mayor Joseph Jaskiewicz and other town officials thus are stuck with the unenviable task of defending actions by previous town administrations that are, practically speaking, indefensible. No matter what happens, Montville's financial liability is very high and taxpayers will be clobbered in either case — a negotiated settlement or the penalties likely to result from the appeals process.

The mayor disagrees. He says: “We offered them a $10 million settlement. The $16 million is too much and we wouldn't be protected in the future. These are our concerns.”

Of course, there is still sentiment in Montville that the town might win the appeal and be home free. This is wishful thinking and exposes town residents to even more financial risk if the 2nd Circuit were to uphold the lower-court ruling, which appears very likely. Despite the heat town officials are taking and the enmity felt by residents toward them and Rand-Whitney, it would be irresponsible of Montville's elected officers to buck the long odds and risk an even greater financial loss by appealing the case.

If the town officials think the $16 million figure is too high, they should negotiate a reduction in the amount. But appealing the case opens the town to excessive liability.

Mayor Jaskiewicz, who understands the situation clearly, needs to overcome the more strident voices in town and tell the people honestly and bluntly what could happen if Montville loses an appeal. Such candor would require political courage not only from the mayor but also from other councilors and public officials.

There is no hiding behind trees on this one. Montville's officials messed up more than a decade ago and taxpayers are now going to pay a significant penalty for their ineptness. There's no way to sugarcoat those facts.

But Montville officials can limit the financial damage, large as it already is, by ending their fight and negotiating a settlement. They should do that posthaste.

Rand Whitney tells Montville no deal
By RAY HACKETT, Norwich Bulletin
January 31, 2007

MONTVILLE -- Rand Whitney will not accept the $10 million settlement offer the Town Council approved Monday night, the lawyer representing the company said Tuesday.

"We're not going to accept that," James E. Cobery said.
  
Instead, the company has renewed its previous settlement offer -- a $13.5 million lump sum payment or a $12.5 million settlement with "town cooperation" in helping the company obtain a water division permit from the state Department of Environmental Protection. Cobery outlined those two options in a letter sent to town officials before Monday's special Town Council meeting.

Montville is facing a $16 million U.S. District Court judgment in favor of Rand Whitney. It includes $55,000 in interest added for each month no resolution is reached. Town officials have not decide whether to appeal the court judgment, but if they do, the town will be required to post a $16 million bond pending a final outcome -- adding to a potential taxpayer impact when the matter finally is resolved.

"If neither side does anything, the appeal goes forward, and two years from now we will have a final, non-appealable $16 million judgment in our favor. We would prefer that didn't happen," Cobery said Tuesday. "We're willing to accept a 25 percent reduction of the $16 million judgment, together with a little cooperation from the town, to bring this matter to an end."

Water dispute

The legal battle centers on a contract where the town provides the company with water. Company officials claim the water quality is well below the standard outlined in the agreement, resulting in corrosion of the plants pipes and equipment.

The council voted 4-3 Monday to authorizes Mayor Joseph Jaskiewicz to make a written $10 million settlement offer, and authorized him to execute that agreement pending final council approval. The resolution contained no time frame or deadline.

Jaskiewicz, who is recovering from an illness, could not be reached Tuesday for comment. Cobery said he wishes Jaskiewicz a speedy recovery so discussions of a negotiated settlement could continue.

Scott Boyle of New London is building a house in Montville. He said he knew about the long-standing legal battle before he bought property in Montville, but the potential impact on taxes didn't dissuade him. Now, though, he'd like to know what the impact is, and what the town is going to do to avoid future claims.

"My main concern is the contract (between the town and company)," Boyle said. "I think that needs to be extinguished. If there's going to be a $10 million settlement, if that's the final number, then you have to do something about that contract."

The potential impact on taxes worried Ron Bouchard of Norwich enough that he bought property in Lebanon rather than a house in Montville.

"For the same priced house, you're looking at about a $1,500 tax difference right now," he said, "and that's before anyone knows what kind of impact this is going to have on taxes (in Montville). It could be significant. And not knowing, that was a concern."

By Amy Renczkowski , Special To The Day  
Published on 1/30/2007

Montville — The Town Council voted 4-3 Monday night to authorize the mayor to publicly offer Rand-Whitney Containerboard $10 million to settle litigation the firm initiated more than a decade ago.  The proposal also calls for a $1 million indemnification cap to protect the town from additional payments.

It marked the first time negotiations have been made public in the lawsuit over the quality of treated wastewater the town's Water Pollution Control Authority provides the company for its papermaking operations. The litigation could cost the town almost $16 million.  Councilor Billy Caron proposed the resolution to make public the settlement's terms. “It's the right thing to do, inform the citizens and let them know what we've been doing,” he said.

The town is still obligated by the contract it signed with Rand-Whitney in 1996 and which led to the litigation. Montville resident Russell Wehner said the termination of the contract should be part of the settlement.

“The problem isn't going to be solved if the contract still exists,” he said.

Last week, Judge Holly B. Fitzsimmons demanded that Montville post a bond if it wants to appeal a judgment in the lawsuit, which is pending in U.S. District Court in Bridgeport.  Fitzsimmons denied the town's motion to be given relief from posting a bond and ordered Montville to ask the town's citizens to approve a $16 million bond or to pay an appeal bond for 1 percent of the judgment or $160,000 a year, until the appeal is decided.

“If we give the Kraft family (owner of Rand-Whitney) another break, it would be a crime to every resident in Montville,” said Gary Murphy, chief of the Oakdale Fire Co. “We've bent over backwards for them.”

Murphy said he was always in favor of the settlement proposals being made public to the community.

“Everybody would like to be well-informed. How can I make an honest answer without knowing all the facts?” Murphy asked.

Rand-Whitney General Manager James Wood was the only representative from the company at the meeting. He said that over the years there have been a number of opportunities to settle the lawsuit.

“I honestly thought we had a settlement back in September,” Wood said. “People shook hands. I thought it was finally behind us.”

Wood is also uneasy about the ongoing dispute.

“Sixteen-million dollars is staring us all in the face,” Wood said. “It's not pretty when you do the math.”

Montville — After 10 years of litigation, a federal judge has entered a $13.5 million judgment against the town of Montville and in favor of Rand-Whitney Containerboard, which successfully argued that the public water the town sends the company is of poor quality.

Former Montville Employee Sent to Jail for Embezzlement 
DAY
By Karen Florin
Published on 3/22/2007

Longtime Montville employee Linda K. Rivera was sentenced to 90 days in prison and five years of probation today for embezzling more than $51,500 from the town's Water Pollution Control Authority.

Rivera, 52, has made full restitution, but Judge Susan B. Handy ordered her to pay an additional $55,000 that the town spent conducting an audit and paying Rivera while investigating the theft. 

With town officials and her husband looking on, Rivera apologized to her family, town employees and citizens of Montville before she was led away to prison.

"She is genuinely remorseful and very sorry for what's occurred," said her attorney, John Cocheo.

Her formal sentence, for first-degree larceny, is three years in prison, suspended after 90 days, and five years of probation.

Montville Official Pleads Guilty to Embezzlement
DAY
By Karen Florin
Published on 1/23/2007

Former Montville Water Control Pollution Authority administrator Linda Rivera pleaded guilty this morning in New London Superior Court to embezzling more than $51,500 from the authority between 2003 and 2005.

The 52-year-old  Willimantic woman faces up to six months in prison when she is sentenced on March 6. She pleaded guilty to first-degree larceny.

Rivera has paid the money back and it will be turned over to the town prior to her sentencing, according to Prosecutor Lawrence J. Tytla. Judge Susan B. Handy said she would also consider ordering restitution of costs involved with auditing the WPCA funds, attorneys and employee overtime accrued during the investigation.

Rivera had served as deputy administrator for the WPCA since 1994.  

Montville Official Resigns In Anger - Head of beleaguered WPCA blasts town for 'tying my hands'
DAY
By Eileen Mcnamara
Published on 6/20/2006             
 
Montville — Michael Hillsberg, administrator of the town's beleaguered Water Pollution Control Authority, is stepping down, citing mounting frustrations with the authority's problems.  In a letter to authority members last week, Hillsberg blasted town leaders for what he said is their effort to “restrict our reorganization efforts and to publicly humiliate the staff.”

Hillsberg, who works as the authority's part-time administrator and earns about $17,000 per year, also blamed the town for forcing up the costs of the WPCA's operations and “tying my hands on what existing staff and myself are able to accomplish.”

As an example, Hillsberg, who works as the finance director in Hebron, cited the hiring of a part-time clerk in the WPCA's offices instead of a full-time employee, as WPCA officials had recommended.  His resignation, effective Saturday, comes on the heels of a report from the town's auditors detailing significant and numerous errors in the WPCA's accounts. It also comes about a month after the WPCA's former deputy administrator was arrested on a larceny charge in connection with $51,000 in missing WPCA funds.

Hillsberg could not be reached for comment Monday.  Eugene Jambor, the authority's chairman, said the agency would meet soon to decide what to do next.

“We'll have a special meeting and decide ... what would be best for the town and the WPCA,” Jambor said. He also said the authority is still working on a plan to correct the problems noted in the recent auditor's report.  Officials have said the deficiencies are related to poor bookkeeping and not more missing money.  Mayor Joseph Jaskiewicz said Hillsberg's abrupt resignation comes as a surprise. He also said he was disappointed that Hillsberg blamed town officials for the WPCA's woes.

A subcommittee of the Town Council recently recommended merging the authority's accounting functions with the town to provide better oversight of the agency's fiscal responsibilities. The full council, however, narrowly defeated the proposal, which was drafted after the town discovered that the WPCA's long-time deputy administrator, Linda Rivera, had misappropriated funds.

Rivera was fired and later arrested. Her case is pending in New London Superior Court.

In his resignation letter, Hillsberg accused Jaskiewicz of seeking to have the town take over the WPCA's accounting functions “so that salaries of finance staff can be increased ...” He also said some town councilors are intent “on bashing the WPCA.”

Jaskiewicz defended his staff and the council. He said it was independent auditors who recommended merging the WPCA's accounting functions with the town and who brought to the town's attention the accounting problems in the authority's offices.

“This is what the auditors said –– that's not a public embarrassment,” Jaskiewicz said.

Besides it's accounting deficiencies and the arrest of one of its former officials, the town and WPCA were sued by one of the authority's biggest customers, Rand-Whitney Containerboard, over the quality of water the authority provides the paper company. A federal jury has ruled that the town must pay Rand-Whitney $10 million in damages in that case. Rand-Whitney also is seeking about $4.5 million in legal fees from the town.

The judge overseeing it has not yet ruled on either the jury verdict or Rand-Whitney's request for legal fees.